Del Monte Pacific secures P23-B bridge loans

Posted at 01/15/14 12:33 PM

MANILA, Philippines - Del Monte Pacific said it has secured $515 million (around P23 billion) in bridge financing from BDO Unibank and Bank of the Philippine Islands (BPI) to fund its proposed acquisition of the consumer food business of Del Monte Corp.

In a disclosure to the stock exchange, Del Monte Pacific said it has entered into a bridge loan facility agreement for up to $350 million (around P15.6 billion) with BDO and up to $165 million (around P7.4 billion) with BPI.

The BPI loan facility is guaranteed by NutriAsia Pacific Ltd. (NAPL), which owns 67% of Del Monte Pacific. NAPL is owned by the NutriAsia group, which is majority-owned by the Campos family.

"The Board wishes to disclose that the terms of the BPI facility place restrictions on any change in control of the Company. Under the BPI facility, the Company’s ceasing to become a subsidiary of NAPL constitutes an event of default which will give the lender the right to require the Company to repay all amounts owing under the BPI facility," the company said.

At the same time, Del Monte Pacific said it intends to undertake a share placement of $150 million as part of the funding for the proposed acquisition.

"The company is in discussions with strategic investors to finalise the terms of an equity investment into the Group. The investment amount will be about $74.5 million and it will be used to partially fund the proposed acquisition. On this basis the balance of the funding to be raised is $75.5 million which can be raised either through a share placement or a medium term loan or a combination thereof.

Last year, Del Monte Pacific said it will buy the canned food business of private equity-backed Del Monte Foods Consumer Products Inc for $1.7 billion, gaining a direct presence in the key U.S. market and reuniting a substantial portion of the Del Monte brand family.

The company then said the acquisition will give it the No. 1 branded position in major canned fruit and vegetable categories in the United States as well as the opportunity to offer its some of own products to the large and fast-growing Asian and Hispanic populations there. - With Reuters